OMIGNAM
OMIGNAM
Peerless Solutions from Namibia’s
Premier Asset Manager PRODUCTION:
Timothy Reeder
Old Mutual Investment Group Namibia (OMIGNAM) began as an asset management business in 1997, as an investment division of Old Mutual Life Namibia. The largest asset manager in the country, it is responsible for delivering sustainable, long-term investment returns to institutional, corporate and retail clients, with assets under management standing at almost N$40 billion. We asked CEO Tyron van Wyk to take us through OMIGNAM’s decorated history and outline how it plans to remain atop an industry packed with both competition and opportunity.
//
“Old Mutual has been in business in Namibia providing insurance and investmentrelated services since the early 1920s,” begins Old Mutual Investment Group Namibia (OMIGNAM) CEO Tyrone van Wyk, “which means that next year will be see us notch up a century of operations in Namibia as Old Mutual.” OMIGNAM operates from Windhoek, and is the largest asset manager in the country, responsible for delivering sustainable, long-term investment returns to institutional, corporate and retail clients, through its specialist team of 17 professionals, excluding some shared and/or other supporting services within the group.
2 / www.enterprise-africa.net
“Old Mutual Asset Management was incorporated in Namibia in 1994,” van Wyk details on the complex history of this African institution, “but began operations in 1997 as an investment division of Old Mutual Life Assurance (Namibia) Limited under the leadership of Johannes Gawaxab. The business originated from Old Mutual’s recognition in the 1990s of the need of a separate business that focussed solely on asset management to provide specialist services in what was, at the time, a developing market. “Our history largely mirrors that of the development of the asset management business as a whole in South Africa.
EXTENSIVE HISTORY “Old Mutual Asset Management has since changed name, to what is now known as Old Mutual Investment Group Namibia,” van Wyk describes, before giving us an outline of his own history with Namibia’s foremost asset manager, in which he has played nearly every role. “I became involved in 2005, when I joined as an investment analyst. Since then I’ve been an analyst, which I did up to 2010, then moved to Chief Investment Officer (CIO) before being appointed, in 2017, as CEO. “I joined Old Mutual Asset Managers after completing my articles and qualifying as a Chartered Accountant at PriceWaterhouseCoopers
INDUSTRY FOCUS: FINANCIAL
initially as an Investment Analyst with a CFA qualification. As such, I moved from auditing to asset management which was an entirely natural flow.” When pressed, van Wyk pinpoints several milestones since OMIGNAM became active, which have been pivotal to bringing the business to where it stands today. “The formation by Gawaxab in 1997, which saw him actually separate out the life business and actively start managing it differently, rather than being just a registered entity, was definitely a big step,” he states.
“In 1998 we then started having our first pooled, registered investment vehicles under our profile range of funds, also launched by Gawaxab. This was key as it was the initial product range of the company. “Also important was the creation of our Managing Infrastructure Development in Namibia (MIDINA) infrastructure fund, in 2003, then in 2005 when I joined we started managing the local equity channel, the Namibian-listed shares, from Windhoek. “Prior to that time, a lot of the
actual investment decision-making was still outsourced to South Africa - Cape Town - even while it was an operational company in Namibia. At that stage, we started taking on functions locally which makes it a key turning point in the timeline of OMIGNAM. “These aside, another key change I would highlight may seem obvious, but in 2007 when we had the name change from Old Mutual Asset Managers to Old Mutual Investment Group, which also changed at the same time in South Africa to reflect the updated vision. In
DYNAMO PROPERTY DEVELOPERS Dynamo Property Developers in partnership with Old Mutual Namibia, have teamed up to provide 207 modern affordable houses in Mariental. Mariental Extension 6 is one of the most affluent suburbs in Mariental. This development will greatly benefit the Mariental Town which is currently facing a huge housing backlog. Mariental is a small market town in the Hardap Region in the heart of southern Namibia and is the administrative centre of the Hardap Region. Sitting astride the main routes into the Kalahari and Namib deserts, Mariental also services the needs of farmers and a large communal community around it. The Hardap Dam, located 14 miles northwest of Mariental, has a man-made lake and recreational area that is popular with campers and fishermen. The housing sector in Namibia is currently faced with a huge backlog in terms of the provision of affordable housing for its citizens. The estimated national housing backlog is 280 000 housing units countrywide growing at an annual rate of about 5900 units (Ministry of Urban and Rural Development, 2017). As at 2015 census population count, Mariental stood at +/- 13 500. And according to the Mariental Municipality data, the current housing backlog in Mariental stands at 55% of the total population. The Mariental Extension 6 development is a mixed –use development, which comprises of; • • • •
Single Residential Ervens General (Multi) Residential Ervens Institutional Ervens Business/Commercial Ervens
The Development will be carried out in 3 phases of which phase one is nearly sold out. The houses comprises of 2 and 3 Bedroom, designed to elegant simplicity and style befitting the esteemed town. SELLING PRICES The selling prices are well set to accommodate different income levels of the residents, starting at N$ 500 000.00. SALES TEAM CONTACT DETAILS Ms. Linda Teofelus +264 811 279589 Ms. Cammy Shilongo +264 816 12220 Mrs Kondjeni Naujoma + 264 812 030429 Mrs Vistorine Andreas + 264 812 702499 Email : marientalext6@gmail.com
4 / www.enterprise-africa.net
OLD MUTUAL NAMIBIA.
RBK Holdings offers a complete ‘hands free’ investment opportunity. Discover how to build wealth with Property Investment.
Physical address:
10th Floor The Terraces 34 Bree Street Cape Town
Phone: 087 898 3536 Postal Address:
PO Box 44 Green point 8051
Phone: 087 898 3536 WWW.OLDMUTUAL.COM.NA Email: info@rbkholdings.com
www.rbkholdings.com www.enterprise-africa.net / 5
INDUSTRY FOCUS: FINANCIAL
2009, the biggest pension fund in the country then allocated two specialised mandates to the business, which have been significant - over N$5 billion at the time. “These focussed on Namibian equity and bonds, and were managed at that stage from Windhoek. This translated to a huge injection into local capabilities and local skillsets. “As of 2012, all South Africa equity, the stock selection on the JSE for external clients, was being managed from Windhoek when it had previously been looked after in Cape Town. This further evidences the building of skills over time. GRUDGE PURCHASE? “Difficult financial conditions naturally create challenges for consumers locally, especially considering the abstract nature of insurance and savings.” This is Tyrone van Wyk’s response when we ask whether OMIGNAM experiences the oft-seen perception of insurance and financial services as purchases made begrudgingly by consumers. “These aren’t luxury goods, or even needs, that we provide in the market, and given that, naturally we face a little more of an uphill battle than someone who provides something more prominent and tangible, like a house, especially in a lower income market such as Namibia. “Compared to insurance,
6 / www.enterprise-africa.net
however, asset management is in a unique position in that it allows for discretionary investment and disinvestment, without the penalty usually associated with traditional insurance, and as such is an attractive consideration as a financial solution for clients. Asset management also allow for flexible contributions and not monthly, which is the case with traditional insurance premiums. “The fact that it cannot be defaulted upon is an extremely important point for people, especially those who may be uncertain of an income stream.” Pension funds are by far the dominant source of assets for OMIGNAM, representing around 51% of industry assets under management, followed by unit trusts that make up around 26%. Long-term assurance represents around 16% with the remaining 7% comprising Short term insurance, medical aid funds, corporates and what van Wyk terms, “natural persons.” SETTING ITSELF APART With a raft of competitors all vying to take OMIGNAM’s top spot, we put it to CEO van Wyk: how does his company keep itself ahead of the rest? “We focus on what we call the five Ps, where we think we are unique,” he explains, going on to detail their signification. “Our investment Philosophy is aligned to the company objectives to
be a consistent competitive long-term wealth manager that focuses on asset fundamentals, while the Process for each investment offering is aligned and interpreted unique to that asset class of solution. Key being the long term consistently competitive performance and as such the process is stable and repeatable. “We aim to always attract and retain People that align with our group values: champion the customer, the power of diversity and inclusion, agile innovation that makes a difference, always act with integrity, respect for each other and communities we serve and trust and accountability. “The track record that we build over time stands for our Performance, and reflects the value we create for clients. We seek to be consistently strong achievers with low possibility of producing weak relative performance, across the full range of our solutions. Through our Product, finally we seek to offer the correct solution to the challenges faced by our clients. “Competition is good, and brings out the best in the solutions we make available to clients,” van Wyk qualifies. “It is my opinion that competition creates an environment where the client benefits and we need to deliver our best at all times. It truly allows market forces to achieve what it is intended to achieve ” This also translate to competition to keep the best personnel, van Wyk
OMIGNAM
continues. “Namibia is a big country with a relatively small population, limiting choice in people with specific skills. As such these people are highly sought after, and therefore our employee value proposition is critical and something that requires the constant attention of a good executive.” The Global Competitiveness Report for 2018 ranks Namibia as 111th in the world on Higher education and training, 33rd in labour market efficiency, 50th in Financial market development and 111th in Market Size. The same report states that an inadequately educated workforce is the second most problematic factor in doing business in Namibia. “Competition for the best people is high as a result, thus we need to offer employees something competitive and create a good working environment in which we can excel.” CRUCIAL TECHNOLOGY OMIGNAM is certainly not alone in its desire to make customer advice increasingly digital, moving forward. ‘Asset and wealth managers should watch financial technology (FinTech) companies closely and adopt a responsive digital strategy,’ warned Pwc’s global 2016 survey. ‘Otherwise, they face losing part of their business to new entrants.’ ‘By being too complacent, investing mainly in self-serving automation and ignoring the imminent technological revolution,’ the report continued, ‘asset and wealth managers might lose touch with their core clients. Keeping abreast with how FinTech is reshaping the industry seems like the most reasonable way forward.” As van Wyk makes clear, OMIGNAM is certainly keeping itself abreast of the potential that FinTech has to offer, although it is not going to make any drastic changes in its service methods just yet. “Trends on advice differ significantly between target markets,” he begins. “As an asset manager with its biggest client base being represented by institutional investors such as
pension funds and long-term assurance our preferred advice to these categories remains in person expert interventions. “These clients really expect that level of interactions. Turning our attention to retail categories such as unit trusts the bulk sources of funds remains institutional, being banks and other financial intermediaries. “However, direct retail clients such as natural persons choose a method of preference depending on age and quantum of investment. This is an area that has significant scope for growth that we engage with and develop, to ensure that we as a business provide low-cost solutions, delivered in an effective way to a wide pool of potential investors.” ROOM TO GROW In all senses, but market share primarily, OMIGNAM is far and away the leading asset manager in Namibia, as van Wyk delineates. “We have assets under management just shy of N$40 billion as of June 2019,” he outlines. “As at June 2018, however, the Namibian asset management industry managed some N$164 billion spread across 27 registered investment managers, with pension funds being the biggest sources of funding and specific ones being a large component thereof. “As such, we need to be realistic with our growth expectations and identify areas for future development, especially given the financial conditions which prevail. “OMIGNAM manages conventional listed assets, alternative assets and offshore funds, meaning we offer investment solutions across the whole spectrum,” van Wyk points out. “We target growth in our local alternative capabilities, as we think this sub-sector has scope for significant growth which will also in turn deepen the local financial markets in Namibia over time. “We also believe that by offering clients good consistent long-term performance they will reward us with the placement of funds,” he reasons. “As such, we focus on building a strong
team with local knowledge and skills to help us achieve these objectives.” This feeds in strongly to OMIGNAM’s extensive efforts to ameliorate the local financial skills pool in Namibia, as van Wyk clarifies. “As a financial services firm and part of a bigger group in the industry we have a lot of initiatives aimed at financial literacy and the need for financial planning and savings in general. These include but are not limited to surveys and publications, as well as sponsorship of specific events and attempts to increase interactions with clients. “As an asset manager more directly we published a Namibian version of the South African OMIGSA-produced Long Term Perspectives, which contained eight key lessons encapsulated and supported by data that we share widely.” We finish by asking van Wyk to outline for us where is next for OMIGNAM. “In short, we have the biggest market share in the country now - we are the biggest asset manager - so we have achieved our main objective and therefore need to set additional goals. “Our long-term ambitions reflect more our desire and our willingness to grow and deepen the local financial markets - to become more important in Namibia and grow investments here. We believe that we can achieve that through our alternative assets, which later on create liquidity in the Namibian market and deepens our industry and the financial markets in the country in general. “It is beneficial both to us as asset and to our competitors, like stockbrokers, and to the industry as a whole; this is one of our noble objectives we are striving towards, in addition to remaining the dominant market player which we are today.”
WWW.OLDMUTUAL.COM.NA
www.enterprise-africa.net / 7
Published by CMB Media Group Chris Bolderstone – General Manager E. chris@cmb-media.co.uk Sackville Place, 44-48 Magdalen Street, Norwich, NR3 1JU T. +44 (0) 20 8123 7859 E. info@cmb-media.co.uk www.cmb-media.co.uk CMB Media Group does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/ or in advertisements included in this magazine do not necessarily represent those of the publisher. Any resemblance to real persons, living or dead is purely coincidental. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. Š CMB Media Group Ltd 2019
AS FEAT UR ED IN
ENTERPRISE AFRICA
J ULY 2019